topic Re: Need a personal loan for down payment on home in Mortgage Loans

Need a personal loan for down payment on home

Anonymous — Tue, 05 Jun 2018 03:44:24 GMT

So I have just got my pre approval for a home however I need to come up with the down payment. My mortage score came in at 625.

Where could I look to get a loan for the deposit? Me and my wife have just moved to CA from TX so a lot of our funds went on the move.

Re: Need a personal loan for down payment on home

Pikaboo-icu — Tue, 05 Jun 2018 03:56:57 GMT

Welcome to My Fico..

It's been a while since I obtained my last mortgage but if I recall correctly they ask you; if any of your down payment is borrowed.

You should inquire with your loan officer or broker because borrowing the down could cause a problem.

Do you have family/friends etc... where you could obtain the down payment?

Re: Need a personal loan for down payment on home

Anonymous — Tue, 05 Jun 2018 13:01:19 GMT

OP, I don't believe this is going to work for you. It's never advised to apply for any credit at all in the months leading up to a mortgage. Not only would doing so likely drop your credit scores (which are already borderline) but the first thing your mortgage lender is going to ask when they see that it's a personal loan is what it's for. A down payment for the mortgage that you're about to apply for would not be an acceptable response.

Re: Need a personal loan for down payment on home

iced — Tue, 05 Jun 2018 13:53:15 GMT

I agree this isn't a wise thing to do and I would be suspect of any bank willing to accomodate this request. This sort of thing was more accepted 12 years ago during the sub-prime bubble, but the days of 0 down and 80% mortgage + 20% loan for home purchases are (hopefully) behind us.

You probably don't want to hear it, but I'd suggest finding a place for rent for much less than you can afford for a few years to save up some money for a down payment. Might be smaller and older and not to your liking, but it'll get you closer to owning a home much faster.

Re: Need a personal loan for down payment on home

Anonymous — Wed, 06 Jun 2018 01:02:59 GMT

Can't link to the websites, but if you google "buying a home with no Money down". It should help you in finding something, if you really want to pursue this. You'd be lookig at either an FHA, VA, or USDA Loan. And you'd obviously need PMI. NFCU offers this also, but you'dneed to be a member.

But you should at least come up with 3-5% of your own Money, if 20% isn't doable. To show them that you're serious, and not a big risk.

Re: Need a personal loan for down payment on home

RobertEG — Wed, 06 Jun 2018 07:56:09 GMT

It will increase your debt to income.

What is your current debt to income ratio, and what are the underwriting criteria?

Re: Need a personal loan for down payment on home

UncleB — Fri, 08 Jun 2018 07:42:17 GMT

Moved thread to 'Mortgages' for additional input on using a personal loan for mortgage down payment...

--UB

Re: Need a personal loan for down payment on home

hollyanimal — Fri, 08 Jun 2018 12:05:40 GMT

It doesn’t sound like your ready to buy a house. Save up a down payment and reserves. Home ownership can be expensive and you need money in reserve to fix things, etc. This is why so many people get into financial trouble as homeowners and end up in foreclosure, etc. Good luck to you.

Re: Need a personal loan for down payment on home

homeloanexpert — Fri, 08 Jun 2018 12:21:39 GMT

On the loan application under the Declaration Section VIII it specficially asks, "Is any part of your down payment borrowed". That's going to cause a problem. If you lack the down payment, you have other options. Depending on what state you live in, there are DPA's (down payment assistant programs) avaialble as long as you have at least a 620 middle credit score. In addition, another option is the USDA RDL that doesn't require any down payment. I strongly recomend you don't go into debt in order to secure your down payment. You might want to speak to another Loan Officer, maybe someone who can offer you more loan products.

Best wishes to you

Re: Need a personal loan for down payment on home

CreditInspired — Fri, 08 Jun 2018 23:33:01 GMT

Hi OP
As another MyFICOer said, it may not be a good time right now to buy a home. You asked about money for a down payment but you need much more. Below is a list:

Monies outside of closing funds:
*EOM - Earnest Money Deposit to be submitted with your real estate contract — minimum usually $1K
*Home Inspection can be between $200-400
*Appraisal can be between $325-550
*Credit check $12-18
*Flood fee $10-20

Then closing Fees at settlement:
*City, county state recordation fee
*Points, loan origination fees if applicable - each 1% of loan
*Hazard insurance - 1 year paid in advance
*Settlement attorney fees
*Lender title policy
*Misc fees, ie, courier, loan pkg prep, etc.
It can cost somewhere in the neighborhood of $6-12K for closing depending on loan and price of home.

And as someone else mentioned, you must have money in reserves for what can go wrong will go wrong once you’re a homeowner.

Re: Need a personal loan for down payment on home

Anonymous — Sat, 09 Jun 2018 04:34:05 GMT

We just did a FHA loan, which I imagine is what you'll have to do with those credit scores. Very early on in the process you will need to put down earnest money, which can be several thousand dollars. You put this down when the seller accepts your offer. Early on you also have to show, by bank account statements, that you have money in the account for the down payment. The will generally want to see several months of bank statements.

Save up the money for the down payment. Even if logistically it was possible to borrow the money, which it most likely isn't, you don't want to be saddled with paying two loans right off the bat. The minimum down payment for FHA is 3.5%. Saying this gently, but if you can't come up with that somehow, it probably isn't the right time to buy a house. I live in Texas also (and I had a maverick of a loan officer who got me approved despite super unusual circumstances, PM if you'd like his contact, I can't recommend this guy strongly enough) and outside of a few areas COL isn't high. Down payment+closing costs for us were under $5000. Our seller paid a large amount of the closing costs, which helped to keep our down payment lower. Work with someone who will help you figure out a way to make it work at minimal cost.

Re: Need a personal loan for down payment on home

pizza1 — Sat, 09 Jun 2018 15:25:57 GMT

Taking on more debt so you can have a DP for home is IMO, dumb and a bad financial move. Not only will that increase your DTI ratio, but if you have to take out a loan for a DP, then you don't have reserves.

Youre in no shape to buy a home. Save some money for a year or two, and get some reserves and then consider being a home owner.

Re: Need a personal loan for down payment on home

NC_Mtg_Loaner — Mon, 11 Jun 2018 16:54:05 GMT

Dont forget about Closing Costs....

Re: Need a personal loan for down payment on home

ShanetheMortgageMan — Tue, 12 Jun 2018 02:25:03 GMT

A personal loan, or any unsecured borrowed funds, are not eligible to use for the down payment or closing costs. However, a family member may take out a loan and then gift you that money, as long as you are not obligated on the loan they took out.

You can borrow secured funds, such as from a 401k, to use as the down payment and closing costs.

The seller can also give you a credit towards your closing costs, but not the down payment.

Lastly, there are down payment assistance programs for first time homebuyers and/or if your household income is low enough. http://www.calhfa.ca.gov is one of the more popular ones in California, there are others too.